How did Lockheed win NASA's Orion contract?

On September 1, 2006, NASA announced it had awarded the multi-billion-dollar contract to build the next-generation manned spacecraft to Lockheed Martin Corporation. While Lockheed Martin is an aerospace giant, with tons of experience in building unmanned rockets, capsules and probes, it has never built a manned spacecraft before. In fact, when it won the contract for the previous iteration of the next-generation manned spacecraft, the X-33 space plane, the project was a complete failure, and NASA's $900 million investment was a wash. So many are wondering why Lockheed won the contract over the team of Northrop Grumman and Boeing. The two companies, together or individually, have built nearly all of NASA's manned spacecraft to date, including the Apollo craft that made the first moon landing and the current space shuttle fleet.

While NASA hasn't offered many details about why it chose Lockheed to build the Orion Crew Exploration Vehicle, industry analysts are speculating. One theory set forth by people who have seen the two proposals says that Lockheed's plan is more open-ended, leaving certain crucial decisions to NASA, while the Grumman-Boeing proposal was more technically detailed. Specifically, some experts claim that the Lockheed plan left the landing sites and potential for reusability of the craft up to NASA, while Grumman-Boeing filled in those details. If NASA wants more control over the project, they may have chosen Lockheed for its willingness to adapt. Lockheed actually submitted a different proposal earlier in the process that described a craft much like the failed X-33 space plane, but NASA rejected it, telling Lockheed to turn in a proposal for a craft that looks like the Apollo. That's exactly what the later proposal described.

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Other analysts say the proposals were nearly identical.

Another possible factor in the mix is Lockheed's tremendous presence in Washington, D.C. -- its headquarters are in Bethesda, Maryland, just outside D.C. An Associated Press report on NASA's decision calls Lockheed Martin an "old Washington firm." It has former Pentagon and NASA employees on its payroll, and 80 percent of its business is with the U.S. Department of Defense. This angle seems to call upon the Washington "old boys network" as at least part of the reason for the decision. Lockheed Martin's Orion office (the company has already been assisting NASA with aspects of the Orion project) also shares a building with NASA's Johnson Space Center in Texas.

A third possible contributing factor is Grumman-Boeing's current monopoly on manned spacecraft. As quoted by the Associated Press, aerospace-industry expert Paul Nisbet states, "NASA decided ... to go with a company that has not been in manned space before, sort of spreading the wealth and making sure they've got two contractors that know the manned space business." It could be that NASA is, in a sense, hedging its bets, so that if one of the firms fails on a manned space project, the other can pick up the slack. As it is, one of Lockheed Martin's subcontractors on the Orion project is the United Space Alliance, a partnership between Lockheed and Boeing.

Regardless of the reasons behind the decision to award the contract to Lockheed, the project is set to unfold at an expensive pace. This first installment of $3.9 billion covers design, construction and testing. This carries the work through 2013 and should result in two Orion vehicles. The first test flight is scheduled for September 2014. A second influx of $3.5 billion runs from 2009 through 2019 and covers the building of additional Orion spacecraft. Some experts predict the project will end up costing twice the allotted amount. NASA reports that we'll see the first manned spaceflight of Orion in 2019 or 2020.

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